2 FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial and enter your PIN when prompted. Otherwise, please send us a chat or immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

3 FOR LIVE EVENT ONLY For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps: In the chat box, type (1) your company name and (2) the number of attendees at your location Click the word balloon button to send

6 Legal Framework HIPAA & States 6 47 states have their own data breach and data breach notification requirements, few states are the same, all require specific adherence. HIPAA Final Omnibus Rule has increased required compliance, increased monetary fine capabilities and created full downstream liability for violations. Managing these risks of compliance is possible, and counsel must be involved in projects involving ephi, new vendors, cloud service providers and risk assessments. Data Privacy & Compliance - TheCarlsonFirm.Com

7 Legal Framework HIPAA & States 7 One Common Element of All States and HIPAA related to Liability Among the 47 different state data protection and data notification laws, and HIPAA one things is common to them all: Data encryption allows for a safe harbor related to many aspects of data incidents analysis, data incident reporting and actual data disclosure for all states and HIPAA. Encryption of sensitive data to and from -and in- the Cloud can greatly reduce potential risks when it comes to a data incident. Data Privacy & Compliance - TheCarlsonFirm.Com

8 HIPAA Background Health Insurance Portability and Accountability Act (HIPAA) 2009 Health Information Technology for Economic and Clinical Health Act (HITECH Act) 2012 Omnibus Final Rule Made significant updates in requirements and scope for HIPAA Privacy, Security, Enforcement, as well as Breach Notification Rules under the HITECH Act. This went into effect in September Data Privacy & Compliance - TheCarlsonFirm.Com

9 HIPAA Background 9 HIPAA Omnibus allows for an increase in and stepped up enforcement for firms which show Willful Neglect e.g., not performing a risk analysis on an organizations ephi HITECH made BAs subject to Security Rule and certain Privacy Rule provisions Breach analysis changed: Is now a presumption of a disclosure. Standard of review changed from "harm standard" to requirement for proper risk assessment which shows it was not a disclosure. Data Privacy & Compliance - TheCarlsonFirm.Com

10 Cloud 10 Cloud services adoption is growing at a compound annual growth rate of over 40% - 50% per year, and is increasing momentum. On premise IT growth is estimated between 5-8% and is declining. If your entity is not in the cloud now, plan that it will be, and it probably already unknowingly is. If your entity is in the cloud now, it is critical you manage that contract and BAA service to avoid costly and public mistakes. Get involved and get ahead of current and future cloud use of your entity. image via CloudProviderUSA.com Data Privacy & Compliance - TheCarlsonFirm.Com

14 Cloud Computing Models 14 Cloud Computing: Service Models 3. Software-as-a-Service ( SaaS ) Most provider control and responsibility. Providers provide the platform and services, and perform software development and sell it as a subscription service. Least responsibility upon the entity or consumer. Data Privacy & Compliance - TheCarlsonFirm.Com

15 Cloud Services & Business Associates 15 Business Associate Defined: On behalf of a covered entity, any entity that: Creates, receives, maintains, or transmits protected health information. Subcontractor Defined: Explicitly in scope, entities which a business associate has delegated a function or service to perform on behalf of the business associate. Cloud service providers are specifically included in scope with added definition language. Data Privacy & Compliance - TheCarlsonFirm.Com

16 Cloud Services & Business Associates 16 Cloud services included in added definition language: "A data storage company that has access to protected health information (whether digital or hard copy) qualifies as a business associate, even if the entity does not view the information or only does so on a random or infrequent basis." Omnibus HIPAA Final Rule. Cloud service providers are in scope as business associates and must sign a BAA, if they won't sign a BAA then don't use that Cloud service provider. Data Privacy & Compliance - TheCarlsonFirm.Com

17 Cloud & Business Associates 17 Subcontractors + ephi are now Business Associates and Business Associates must follow the security rule BAs are subject to Security Rule and certain Privacy Rule provisions Must have proper contracts in place with subcontracted entities, e.g., Cloud Service providers all the way down the chain of data (more on that shortly) Security Rule requires Risk Analysis Data Privacy & Compliance - TheCarlsonFirm.Com

18 Cloud & Business Associates 18 Liability when: Impermissible uses and disclosures Failure to comply with the applicable requirements of the Security Rule Failure to provide e-copy of ephi as specified in the business associate contract Failure to disclose PHI to HHS for HIPAA investigation Data Privacy & Compliance - TheCarlsonFirm.Com

19 19 Legal considerations under HIPAA, HITECH and state privacy laws HIPAA Omnibus Regulations are in full force Record fines are being assessed for HIPAA security rule violations many involve "inadvertent cloud use, inadvertent cloud access or cloud transmission of e- PHI" Performing a proper risk analysis is a must, not doing so may put an entity into willful neglect Entities must perform a risk analysis on systems that store, process or transmit ephi, including cloud Data Privacy & Compliance - TheCarlsonFirm.Com

24 24 Legal considerations under HIPAA, HITECH and state privacy laws Cloud providers need to sign a BAA and be managed and under contract Avoid cloud subcontractors that won't sign a BAA Know where your cloud provider is, and if they use other subcontracted entities Lack of awareness, knowledge or understanding of where an entities data is and goes is not a defense Data Privacy & Compliance - TheCarlsonFirm.Com

30 HIPAA Legal Considerations: Real World 30 c. NYP failed to implement processes for assessing and monitoring all IT equipment, applications, and data systems that were linked to NYP patient data bases prior to the breach incident, and failed to implement security measures sufficient to reduce the risks and vulnerabilities to its ephi to a reasonable and appropriate level. d. NYP failed to implement appropriate policies and procedures for authorizing access to its NYP patient data bases, and it failed to comply with its own policies on information access management. Data Privacy & Compliance - TheCarlsonFirm.Com

32 8 Practical Legal Mitigation Strategies Perform a Risk Analysis and include any interaction in or with the Cloud providers 2. Find all your PHI/Map/Flow PHI movement within your organization, as well as flows to/from third parties 3. Have an accurate map of where your ephi data flows from beginning to end and in-between 4. Have an accurate list of all vendors and subcontractors that are involved in ephi and maintain proper vendor management Data Privacy & Compliance - TheCarlsonFirm.Com

33 8 Practical Legal Mitigation Strategies Conduct a robust review & assessment of where ephi is, and encrypt it wherever possible 6. Have and enforce a Cloud policy 7. Don't get stuck with a mystery cloud where no one (or 1 person) knows how the Cloud really works 8. Strategize and learn how to use and negotiate the contracts, master service agreements, service level agreements, business associate agreements involved Data Privacy & Compliance - TheCarlsonFirm.Com

36 What we ll cover: What is the Cloud? Reality check: When the Cloud isn t. A few good clauses go a long way Where s your data? Who s accessing it? What are they doing with it? When will it be available? What if there s a disaster? Who will be responsible for a security incident? 36

37 Managed Service What is the Cloud: 37

38 What is the Cloud [W]e ve redefined cloud computing to include everything that we already do [...] I can t think of anything that isn t cloud computing. [...] I mean it is the stupidest [thing]. Oh, I am going to access data on a server on the Internet. That is cloud computing? Maybe I m an idiot, but I have no idea what anyone is talking about. [...] It s complete gibberish. It s insane. Larry Ellison CEO of Oracle Corp. September

39 What is the Cloud By implementing hybrid/ cloud computing, [survey] respondents hoped to achieve improved provisioning time, data center scalability and data center security. The gap between expectations and reality, however, was [substantial]. Evolution to the Cloud Survey at page 10 conducted by Symantec Corp.,

43 a few good clauses Where s Your Data? On-shore or off? Facilities Quality? Change of location? 43

44 a few good clauses Where s Your Data? On-shore or off? In no event, whether by itself or through any otherwise approved Third Party Supplier, shall Supplier perform Services outside the continental United States or its commonwealths, territories and possessions (including indirectly via remote network access) without the prior written consent of Customer in each instance. 44

45 a few good clauses Where s Your Data? Facilities Quality? Facility Standards. Supplier will use only data center facilities located in the United States which, in all cases, meet, at least at the facilities level, the Recognized Facility Standards in each of the financial controls, security and infrastructure and operations categories, as defined below ( Approved Facility ). As used herein, Recognized Facility Standards means any of the following within each category: for financial controls, the SSAE 16 standard (and any successor thereto) promulgated by the American Institute of Certified Public Accountants; for security, the AT 101 standards (and any successor thereto) promulgated by the American Institute of Certified Public Accountants, the series standards promulgated by the International Standards Organization (and any successor thereto) for infrastructure and operations the TIA-942/Tier III classification promulgated by the Uptime Institute and the Telecommunications Industry Association (and any successor thereto). 45

46 a few good clauses Where s Your Data? Change of Location? Migration. Supplier shall provide reasonable advance notice of any change in any Approved Facility location with reasonable assurances that the new data center meets the requirements hereunder. Supplier shall perform, at no additional charge (for either fees or expenses), all such services as are necessary to complete the orderly transition of the applicable services and data to the new facilities (the Migration Services ). The Migration Services shall be performed in accordance with a plan and on a schedule approved by Customer, which approval shall not be unreasonably withheld, delayed or conditioned. There shall be no suspension or change in any service levels during the Migration Services unless otherwise agreed in writing by the parties and a discount or waiver of fees is provided to Customer in an amount reasonably proportionate to the period of suspension or magnitude of change. 46

48 a few good clauses Who s Accessing Your Data? Vendor Personnel All Supplier Personnel shall be screened: (a) for convictions of felonies and financialrelated crimes committed during the last seven years; (b) to verify they are not subject to or included on, or otherwise prohibited or debarred under the Lists of Excluded Individuals/Entities maintained by the Office of the Inspector General of the U.S. Health and Human Services Agency; and/or the regulations administered by the Office of Foreign Assets Control of the United States Department of the Treasury through the General Services Administration s Federal Acquisition Regulation compliance program; and (c) for compliance with immigration laws. Without limiting the screening required above, Supplier Personnel having direct access to Customer Data shall be screened for: (i) verification of Social Security Number; (ii) seven-year county of residence criminal conviction (CORI) search; (iii) minimum 5 panel drug screen; (iv) five-year work history; and (v) fingerprinting with the search sent to and conducted by the Department of Justice/FBI; and (vi) education and professional licenses, if applicable. Supplier personnel failing any such screening shall not be assigned to perform Services or shall be removed upon notice to the applicable Customer if discovered after the commencement of performance. 48

49 a few good clauses Who s Accessing Your Data? Subcontractors Supplier shall not, without the prior written consent of Customer, provide the Services through any third party including any Affiliates of Supplier (each a Third Party Supplier ). If a Customer approves Supplier s use of a Third Party Supplier: (a) Supplier shall be the prime contractor to the applicable Customer with respect to such Third Party Supplier and shall assume full responsibility and liability for the Services and performance of the Third Party Supplier; and (b) prior to disclosing any of Customer s or its Affiliates Confidential Information or performance of Services by such Third Party Supplier, Supplier shall have or enter into a written agreement with the Third Party Supplier expressly binding such Third Party Supplier to the confidentiality and data security provisions of this Agreement and such terms shall govern the Third Party Supplier irrespective of any contrary term or condition that may be contained in a separate agreement between Supplier and any Third Party Supplier. Supplier shall provide the applicable Customer with written evidence in a form reasonably acceptable to the Customer of compliance with the foregoing. 49

51 a few good clauses Who s Accessing Your Data? HIPAA BA If BA is permitted to use a Subcontractor under the Underlying Agreement, BA and such Subcontractor shall enter into a written business associate agreement containing the same restrictions and conditions that apply to BA under this BA Agreement. BA also may disclose PHI to a third party (who is not a Subcontractor) to the extent required for the proper management and administration of BA or to carry out BA s legal responsibilities, provided that such third party disclosure is either: (a) Required by Law; or (b) occurs only after BA has obtained reasonable assurance from the third party person or entity to which BA will disclose PHI stating that such person or entity will (i) hold the PHI in confidence and use or further disclose the PHI only for the purpose for which BA disclosed PHI to the person or entity or as such third party is Required by Law to further disclose, and (ii) promptly notify BA of any instance of which the person or entity becomes aware in which the confidentiality of PHI was breached. 51

52 a few good clauses What are they doing with your Data? Restricting Use Allowing Aggregation HIPAA BA Issues 52

53 a few good clauses What are they doing with it? Option 1 - Restrictive Customer Data. As between Supplier and Customer, all data provided to Supplier by or on behalf of Customer under an Agreement ( Customer Data ), remains the sole property of Customer. Customer Data shall be considered Confidential Information, subject to the terms of an Agreement. Supplier Personnel shall not have the right to copy Customer Data except to the limited extent necessary to perform under an Agreement. Supplier shall be responsible for deletion, destruction or alteration of Customer Data while in the possession or custody or under the control of Supplier Personnel. The Customer Data shall not be used by Supplier for any purpose other than that of providing Services, nor shall the Customer Data be disclosed, sold, assigned, leased, benchmarked, aggregated or otherwise disposed of to third parties by Supplier or commercially exploited by or on behalf of Supplier and Supplier Personnel. 53

54 a few good clauses What are they doing with it? Option 2 Less Restrictive Disclosure of Claims Data. Notwithstanding any other provision of this Agreement, TPA and TPA s Affiliates shall have the right to use and disclose Claims Data collected in the performance of Services under this Agreement, so long as: (a) the Claims Data is aggregated and de-identified in a manner consistent with the requirements of HIPAA and in all instances shall not disclose Claim Data in any manner that would reveal the identity of patients, Plan Participants, the pharmaceuticals authorized for them or any clinical and PHI about them sufficient to identify them; and the Claims Data is used or disclosed for research, health oversight activities, benchmarking, and analysis of industry and health care trends or other substantially similar purposes permitted by law and consistent with the disclosure practices described to BSC upon entering into this Agreement; or (b) a Member has consented to the release of his or her individually identifiable data. Under no circumstances shall the Claims Data be sold to any third party or used (whether or not sold) by any Affiliate of TPA for commercial gain. 54

55 a few good clauses What are they doing with it? HIPAA BA BA shall not use or disclose PHI except to the Minimum Necessary degree required to perform for the benefit of CE under the Underlying Contract and then only to the extent permitted by this BA Agreement or as Required by Law. BA shall develop, implement, maintain and use appropriate safeguards to protect the privacy of PHI to comply with HIPAA Rules. This shall include appropriate administrative, technical and physical safeguards that reasonably and appropriately protect the confidentiality, integrity and availability of ephi that BA creates, receives, maintains or transmits. BA may use PHI internally for its proper management and administration or to carry out its legal responsibilities. 55

56 a few good clauses When will your data be available? Uptime SLA Periodic Delivery Post-Termination HIPPA BA Issues 56

57 a few good clauses When will your data be available? Uptime SLA the basics Without limiting Supplier s obligations to meet the Availability Service Level (defined below), Supplier shall use commercially reasonable efforts to make sure that the Software and portions thereof will be available to Authorized Users 24 hours per day, 7 days per week, 365 days per year. Notwithstanding the foregoing, Supplier shall ensure that the Software is available for use by Authorized Users ninety-nine and nine tenths percent (99.9%) of the time 7 days per week, 365 days per year excluding Scheduled Downtime (the Availability Service Level ). For purposes of this Agreement, System available and its variants means a working database server with the Software and Customer s database(s) mounted, running, and accessible from all servers to the public Internet. Scheduled Downtime means 6:00 p.m. Saturday Eastern prevailing time through 5 a.m. Monday Eastern prevailing time. 57

58 a few good clauses When will your data be available? Uptime SLA tricks of the trade Supplier will be responsible for the hardware, equipment, telecommunications and networking infrastructure necessary to provide the Software from a point of demarcation starting with the Appliance permitting ingress to the Data Center from the WAN Circuit, continuing thereafter to the Data Center s egress Appliance back to the Public Circuit. For avoidance of doubt, Supplier is not responsible for the Public Circuit itself, except that Supplier shall perform an industry-accepted ping-like monitoring test of the telecommunications line connected to its ingress/egress Appliance every ten (10) minutes and immediately take corrective action if such test does not return a signal indicating proper functioning. As used herein the term Appliance means either a router, or if a dedicated PBX or switching software is leased or owned by Supplier, such PBX or switching software; and where the term Public Circuit means the third party provided circuits, overland and/or submarine cabling and other connectivity infrastructure from a point of demarcation starting at the point immediately after the ingress/egress Appliance at the Customer site to the point immediately before the ingress/egress Appliance router at the Data Centers. 58

59 a few good clauses When will your data be available? Periodic Delivery Data Refreshes; Backup and Data Return. On a continuous basis, Supplier shall refresh Customer Data transmitted through the Software provided by Customer s Authorized Users. Upon Customer s written request from time to time (but no more than once per quarter), Supplier shall provide to Customer a copy of all of Customer Data provided by Customer s Authorized Users in a format mutually agreed to by the parties. Unless more frequent back-ups are provided under Supplier s separate back-up and DR-BC Plan, back-up services shall be performed for all Customer Data at least daily with offsite storage of all media used therefor. 59

60 a few good clauses When will your data be available? Post Termination The Disengagement Services shall include the performance by Supplier of such services as shall be necessary to facilitate the orderly transfer of the Client Data to Client or its designee including delivery of Client Data in native or other agreed format which shall in all events be readable/useable with common, commercially available software. Supplier shall have no right to delete Client Data from its servers until 180 days after termination or expiration or 10 days following completion of the agreed Disengagement Services, whichever is later. At that time, Supplier shall certify to such destruction in writing. 60

61 a few good clauses When will your data be available? HIPAA - BA BA agrees to provide access to PHI in a Designated Record Set, in the time and manner Required by Law, to CE or, as directed by CE, to a Data Subject, in order to meet the requirements under 45 C.F.R BA may impose a reasonable cost-based fee for the provision of copies of PHI in a Designated Record Set in accordance with 45 C.F.R (c)(4). In addition, BA will, upon receipt of written notice from the Requesting Party, promptly amend or permit the Requesting Party access to amend any portion of a Data Subject s PHI that is in a Designated Record Set in the custody or control of BA, so that CE may meet its access obligations under 45 C.F.R BA shall also, as necessary to satisfy CE s obligations under 45 C.F.R , maintain and make available such information as is required to provide an accounting of disclosure to Data Subjects. If CE requests an accounting of a Data Subject s PHI more than once in any twelve (12) month period, BA will impose a reasonable fee for such accounting in accordance with 45 C.F.R (c). As used herein Data Subject means the person to whom the applicable PHI relates; Requesting Party means CE or the Data Subject, as applicable to each request. 61

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